• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Order of Authorization to Pay Pre-Petition Wages

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

Colo_KT

New member
Colorado

I am owed wages and accrued time by an employer that is in chapter 11. They did not file a first day motion to pay pre-petition wages.

As a creditor (priority unsecured, I assume) am I able to file a motion for order to authorize payment of pre-petition wages or is only the debtor allowed to file this type of motion? Is the order just an authorization or does it compel the employer to pay uncontested wages? Are they required to pay all wages or can they pick and choose?
 


LdiJ

Senior Member
Colorado

I am owed wages and accrued time by an employer that is in chapter 11. They did not file a first day motion to pay pre-petition wages.

As a creditor (priority unsecured, I assume) am I able to file a motion for order to authorize payment of pre-petition wages or is only the debtor allowed to file this type of motion? Is the order just an authorization or does it compel the employer to pay uncontested wages? Are they required to pay all wages or can they pick and choose?
Wages have a priority that is higher than other unsecured creditors. Generally the employees are notified that they need to file a claim if they are due wages. However the employer certainly cannot "pick and choose" what wages to pay.
 
@Colo_KT

You do not have standing to file the First Day Motion. Such Motions are typically filed because the Debtor-In-Possession wants to keep its employees "happy". Such Motions, while called "First Day", are usually filed within the first week of the filing of the Petition. Only the DIP has standing to seek such an Order and once such an Order is issued, the DIP can pay the pre petition wages. Please note. . . a First Day Motion is not going to ask the Court for permission to pay wages owed to a past employee. It will only cover current employees as such may be necessary to keep operating.

If you are owed wages, those wages incurred within the 180 days prior to the Petition date, up to a certain dollar amount, are "priority" and will need to be paid pursuant to the Chapter 11 Plan. Wages owed for a time period beyond 180 or that which are in excess of the priority amount, are treated as a general unsecured claim and may or may not be paid in full under the Chapter 11 Plan.

Des.
 
Sponsored Ad

Top